Earned Income

The Earned Income Credit is a refundable credit for low-income workers with earned income. The credit is available for taxpayers with or without children. You could be entitled to a refundable credit of up to $3,169 (if you have one qualifying child), $5,236 (if you have two qualifying children), $5,891 (if you have more than two children), or $475 (if you have no qualifying children).

You have earned income if you work for someone else or if you are self-employed. Taxable earned income includes wages, salaries, tips, union strike benefits, long-term disability benefits received prior to minimum retirement age, and net earnings from self-employment. You may elect to include nontaxable combat pay in earned income for the Earned Income Credit purposes. The ability to decide whether to include the combat pay enables you to choose the largest possible Earned Income Credit.

If you qualify for the Earned Income Credit, it reduces the tax you owe. The credit is refundable if your withholdings and Earned Income Credit amount are greater than the tax liability you may have on your tax return.